Would I get paid my commission if I left the company?

| October 11th, 2017 | 1 Comment »

Question:  If I leave this company in around a month, would I still get paid my commissions from the deal I just won over the next 3 years? I’ve been working for a company for around 3 years, I have been made a better offer at another company and thinking about quitting my job and joining this new company.  I have around $400,000.00 in commissions from a large job I just landed that will be paid out upon monies received over the next 3 years from now.

Answer: This is an excellent question.  Many employees wonder – what happens if I leave my job right before I am supposed to get my bonus?  Is there any way to get the bonus?  The answer is maybe.  It will depend on the specific facts of your case, and whether there are any written documents that address your commissions or bonus payments (e.g. an employment contract, an Annual Incentive Plan, etc.)  Other important considerations will include:

  • Whether you are leaving the company of your own accord (as opposed to having your employment terminated),
  • How your commissions or bonus payments are earned or calculated (have you already earned the bonus?  does the company use a specific formula, or is the whole payment subject to discretion?), and
  • Are there any documents which address what happens to your bonus or commissions if your employment ends?

One of our lawyers can review your situation and let you know if, and how, you can claim your commission payments even AFTER you have left the company.  You do not necessarily have to forfeit your bonus or commissions just because you get a new job before it is paid.

6 Things to Know About Non-Competition Clause

| January 28th, 2016 | No Comments »

non-compete clauseThe non-competition clause, otherwise known as a ‘Non-Compete’, is typically an agreement between an employee and employer that prevents the employee from participating in a business that competes with the employer.

Not all Non-Competes are enforceable, and often courts will strike them out of employment contracts for constituting a ‘restraint on trade’. Whether you are being pressured to sign a Non-Compete, or have already agreed to one, make sure you know these six things:

  1. Non-Competes cannot be forced: A Non-Compete is an agreement between two parties.  In order for an agreement to be enforceable, each party to the agreement must receive something of value.  If you agreed to the Non-Compete after commencing employment, and did not receive an incentive for doing so, your Non-Compete may be unenforceable.
  2. Non-Competes are generally unenforceable against former employees: There is a public interest in allowing individuals to pursue their livelihood as they see fit. Where there is an imbalance in bargaining power (e.g. the employee had little or no say into the terms of their employment contract), the Non-Compete is less likely to be upheld.
  3. Non-Competes must be limited in scope: A Non-Compete that lasts for two years and applies to all of North America is less likely to be enforced than one that lasts for six months, and applies to a small geographic territory.
  4. NonCompetes will not be upheld where a non-solicitation clause will do: Employers utilize non-competes to protect their business interests. Often that interest takes the form of a client or customer list. Courts will refuse to enforce a Non-Compete where a non-solicitation clause protects the employer’s interest.
  5. The employer must prove actual harm: In order for a Non-Compete to be enforced, the employer is faced with the burden of proving that a specific harm will arise if it is not enforced. The burden cannot be discharged by speculation or prospective thinking.
  6. You have options: Agreeing to a Non-Compete does not mean it is set in stone. Similarly, a prospective employer may be agreeable to removing it from your employment contract. If you are faced with a current or future Non-Compete, it is imperative to speak with a competent employment lawyer to know your rights.

Author: Marc Kitay, Whitten & Lublin

Your Rights When You Face Termination Without Cause

| January 5th, 2016 | No Comments »

A terminated employee is typically entitled to fair severance, unless he or she did something so serious to warrant losing it (called “termination for cause”).

An employee’s actual entitlement is determined by first looking at whatever deal they might have made with their company.  Such a deal – called a “termination clause” – is usually found in an “employment agreement” or in a similar but less formal document signed by both sides.  Very commonly, these arrangements are set by the company itself and are most beneficial to it.  Therefore, it’s important to try to negotiate early on before signing anything, with the assistance of a trained lawyer.

Courts will only allow arrangements that provide for at least the minimum amount(s) required by the government.  Because these arrangements are usually company-friendly, it is necessary to speak to an employment lawyer to determine if there is a legal basis to get a better severance deal than what it appears to say in the agreement.  Our firm regularly finds ways to get much better deals for terminated employees in circumstances that allow for it.  One example is where an employee is hired to do one job, is promoted several times, and then is terminated years later.  The termination section in the employment agreement that was initially signed likely won’t be accepted by the courts in that situation, since the employee is serving a totally different role by that point.

That decision could be the difference between a severance of several thousand dollars… or tens of thousands of dollars.

From an employer’s standpoint, because fair severance can become very costly, the safest thing to do is have an employment lawyer draft an agreement with a legally enforceable termination clause.  Too often, we see companies pulling agreements off the Internet, or using non-specialized lawyers to put them together.  This is a problem, because very often the law has changed, or a non-expert misses something of significance.  The agreements can go a step further to address other issues of importance to the business, such as post-employment obligations, confidentiality, and so forth.

Author: Daniel Chodos, Whitten & Lublin

Ex-employee soliciting former employer clients: is it legal?

| August 13th, 2014 | No Comments »

In his recent Globe and Mail column, Toronto Employment Lawyer Daniel Lublin, answers some of the most common questions that employers and employees alike have regarding termination of employment.

Ex-employees often want to understand whether soliciting their former employer’s clients is legal, especially when they have not signed a non-compete or non-solicitation clause. What Mr. Lublin explains is that unless you signed an agreement that unequivocally prohibits you from competing or from contacting clients for a reasonably defined period of time, you are generally allowed to do so. There are a few narrow exceptions to this rule, such as misuse of confidential information that you retained from your former employer (for instance, a client contact list) or in cases where you held such an important role at your former employer that they are particularly vulnerable to your actions after departure.

Employees often become confused between different terms when it comes to severance, and they want to understand the difference between severance pay and statutory severance pay . Mr. Lublin describes the difference between the two types of “severance.” Statutory severance pay is simply a minimum, like a minimum wage. This payment is legally required in most cases and is not dependent on the employer’s payroll size. Employees can be (and most often are) entitled to more than the statutory severance pay, just like they are often entitled to more than minimum wage.

When it comes to employment law, it is always good idea to contact an expert who will be able to provide more detailed advice and information about your legal rights. Daniel Lublin’s full article Can I contact clients from my former employer? can be read in his Globe and Mail column.

Tips on Going with or without a Contract

| May 27th, 2013 | No Comments »

Is a signed employment contract a good thing or are you better off without one? As Daniel Lublin explained in his latest Globe and Mail article, without a written contract, every employee is guaranteed a number of implied legal rights.

 

Are You Guaranteed Rights Without a Contract?

In today’s workplace, employers are increasingly aware of their ability to use employment contracts as loopholes to avoid legal responsibilities. This means that, as an employee, it may be in your interest to forgo a contract in favour of the rights that the government guarantees.

 

Employment Rights

Examples include the right to reasonable notice of termination, which prevents dismissal without notice or severance; the right to refuse adverse changes to compensation or position, from which constructive dismissals arise; and the right to compete freely with a former employer following departure.  However, many contracts reduce or remove these rights entirely, leaving employees with a vastly different playing field than what they would have otherwise received. In these cases, you’re best suited to go without a contract rather than with one.

Daniel Lublin’s whole article, Have you read the fine print of your employment contract? , can be read in the Globe and Mail.

 

Signing a contract after your new job has already begun

| June 21st, 2012 | No Comments »

How do you deal with a situation wherein an employee is told to sign a contract after his or her job has already started?  Can this contract be challenged without the risk of one loosing their new job?

In his latest article in the Metro, Toronto Employment Lawyer, Daniel Lublin explains a scenario in which an employment contract can be challenged after a termination.

Employees in Canada are entitled to fair severance payments upon their termination, unless there is a contract that specifies some other amount.  For that contract to be enforceable, employees must first voluntarily agree to the contract, otherwise it may be set aside.  When an employee is given a contract after he or she starts a new job, the contract must provide them with something of additional value in exchange for signing the contract.

Anthony Fasullo experienced this situation on his third day of work with Investments Hardware Ltd., when he was asked to sign an employment contract, without previously being informed of a  substantial limitation on any additional severance upon a termination.  Considering that he had resigned from his previous job just few days prior to that in order to accept this new position, he was left with no choice but to sign this new contract.

A few years later, Fasullo was fired and Investments Hardware Ltd., sought to enforce that contract in order to pay him a small amount of severance.  Recently, a judge struck down the contract and awarded Fasullo damages for wrongful dismissal.

More on employment contracts can be found here and the full article written by Daniel Lublin, Toronto Employment Lawyer, can be found here.